Foxx pitches legislation as means to end federal welfare for U.S. sugar producers

U.S. Rep. Virginia Foxx brought to Winston-Salem on Friday her quest to lower, if not eliminate, subsidies for U.S. sugar growers and open the domestic market for more entrants.

Foxx, R-5th., held a roundtable discussion with officials with Bimbo Bakeries USA, Dewey’s Bakery, Flowers Foods, Krispy Kreme Doughnuts Inc. and Mother Murphy’s. She was accompanied by Mike Goscinski of the American Bakers Association.

Foxx recently took over as lead sponsor of the Sugar Policy Modernization Act, also known as House Resolution 4265, that was introduced Nov. 7.

The bipartisan legislation, which has 80 House co-sponsors, has taken on new importance because it was submitted as an amendment to the federal House farm bill, which could have its first vote as early as Thursday.

According to a USA Today media affiliate, the current sugar program allows the U.S. Agriculture Department to: limit foreign imports that could undercut U.S. sugar prices; limit how much can be sold to prevent an oversupply and price plummet; buy excess sugar to prevent a price plummet; and loan sugar farmers money.

The resolution could exclude U.S. sugar farmers from loans that are available to other commodities.

Foxx has been quoted in national conservative media as saying the sugar program represents “crony capitalism at best and gross negligence at worst.”

Foxx said the resolution is her response to the “effects of the U.S. government’s failed sugar policy on North Carolina’s food manufacturing industry … that subsidizes sugar growers at the cost of small business and food manufacturers across the country.”

“The program raises the price of sugar for U.S.-based food manufacturers and families alike, raising prices at the grocery checkout line, and putting U.S. manufacturing jobs at risk.”

Consumers and food manufacturers pay between $2.4 billion and $4 billion a year more for sugar because of the current program, according to a 2017 study by the American Enterprise Institute.

“To me, it’s a really simple bill,” Foxx said. “You get rid of product allotments, don’t allow other countries to dump their products here, and you allow the market to flourish naturally.”

Rubio opposition
Political analysts and economists say Foxx is fighting an uphill battle, including within the Republican Party, with her resolution.

Foxx expressed confidence to the local food executives that the amendment had enough votes to pass.

She did acknowledge, however, that opponents of the legislation are communicating that its passage could derail the vote on the overall farm bill.

“I believe, and Rep. (Ted) Budd believes, that passage of the amendment actually would shore up support for the entire farm bill,” Foxx said. “Some members have said they may not vote for the farm bill if this amendment isn’t in it.”

Opponents of Foxx’s legislation include both of Florida’s U.S. senators, Republican Marco Rubio and Democrat Bill Nelson. Both say they fear the U.S. sugar industry going away without the subsidies since other countries, including Brazil, subsidize their sugar growers.

The bill has not advanced in the House Agriculture committee since being introduced. It also would require being heard in the House Ways and Means committee.

“Whenever Congress takes up the task of reauthorizing the farm bill, as it is doing this summer, there are calls to reform some of the various subsidy programs, with the sugar subsidy program one of the chief targets,” said John Dinan, a political science professor at Wake Forest University.

“Not surprisingly, efforts to change the sugar subsidy program encounter fierce push-back from Congress members representing areas that grow sugar, especially Florida and to some extent Louisiana, in a way that leads to some clear geographic divisions in Congress when it comes to voting on the matter.”

The American Sugar Alliance, which says it represents 142,000 U.S. sugar farmers, is prodding leaders of the House Agriculture committee to defeat Foxx’s resolution.

“Sugar producers are facing dire economic pressures right now, and a strong sugar policy will be essential to their ability to obtain financing and weather the storm,” the alliance said in its April 18 letter to committee leaders.

“Opponents of this policy — driven by multinational food manufacturers — are aggressively attacking sugar producers’ safety net, which is designed to counter foreign subsidies and unfair trade practices.

“These attacks come even though food makers have achieved strong profits by charging consumers more for sweetened products and pocketing the savings from sugar prices that are lower today than in 1980,” the trade group said.

The trade group countered the American Enterprise Institute report by saying U.S. grocery shoppers pay 22 percent less for sugar than the rest of the developed world, and U.S. confectioners pay 25 percent less than companies in other developed countries.

‘A tough sell’
David Murphy, with Mother Murphy’s, said at the roundtable that eliminating sugar subsidies and opening up the sugar market “has been a tough sell for a lot of years.” The Greensboro company supplies flavoring to most of the other companies at the roundtable.

Murphy asked about the individual bill’s chances of clearing Congress. Foxx said it has been a challenge even though the bill has been gaining more votes with each attempt.

Michael Goscinski, director of government relations for American Bankers Association, called the legislation “a modest reform.”

“We believe it has the potential to add more growers and more domestic jobs, rather than the current program continuing to be a job killer for food manufacturers.”

Zagros Madjd-Sadjadi, an economics professor at Winston-Salem State University, said he supports ending the subsidies for U.S. sugar growers as part of his philosophy for opposing legislated trade restrictions.

“I think it will be difficult for this to gain traction in Congress because corn producers also support the sugar tariff due to the fact that corn producers are actually the prime beneficiaries of the sugar polices rather than the American sugar producers,” Madjd-Sadjadi said.

Madjd-Sadjadi said the federal government and consumers “would be far better off just giving every sugar farmer in America $100,000 every year, and then make them compete on the world stage without any other subsidies and by ridding ourselves of the sugar tariffs and quotas.”

About Scott Livengood

Scott Livengood is the owner and CEO of Dewey’s Bakery, Inc., a commercial wholesale bakery with a respected national brand of ultra premium cookies and crackers.

Previously, Scott worked at Krispy Kreme Doughnuts for 27 years, starting as a trainee in 1977. He was appointed President of the company in 1992, then CEO and Chairman of the Board.

Scott has served on numerous boards including the Carter Center, the Calloway School of Business and the Babcock School of Management, Habitat for Humanity of Forsyth County, and the Winston-Salem Chamber of Commerce.

He started a new business, StoryWork International, in 2016 with Richard Stone. The signature achievement to date is LivingStories, a story-based program for improved patient experiences and outcomes in partnership with Novant Health.